Martha Lamkin, President and CEO, Lumina Foundation for Education: Working to Expand Access to Higher Education for All Americans

July 28, 2003
Martha Lamkin, President and CEO, Lumina Foundation for Education: Working to Expand Access to Higher Education for All Americans

The September 11, 2001, attacks on the World Trade Center and the Pentagon and the crash of United Airlines Flight 93 in a field in southwestern Pennsylvania claimed the lives of almost three thousand individuals. The murder of so many people was a devastating loss for the country and a tragedy for the families of the victims.

In the days that followed, Americans responded to the plight of the families with unprecedented generosity. Donations — of blood, emergency supplies, and cash — poured into the Red Cross, Salvation Army, and other relief agencies. Meanwhile, in Indianapolis, executives of the Lumina Foundation for Education, which works to expand access to higher education for all Americans, struggled to come up with a response that would be both meaningful and appropriate in the context of its mission. The answer they arrived at was a scholarship fund for the dependents of those who were killed or injured on 9/11.

In March, Philanthropy News Digest spoke with Martha Lamkin, president and CEO of Lumina, about the Families of Freedom Scholarship Fund and the foundation's partnership with Scholarship America. Lamkin also shared her thoughts about skyrocketing postsecondary education costs, steps that need to be taken to ensure that a college education is available to all Americans, and Lumina's efforts to raise and addresse critical issues related to postsecondary education.

Lamkin has directed the Lumina Foundation since its inception in 1997 and was instrumental in developing the concept of the foundation during her tenure as executive vice president of corporate advancement at USA Group, Inc., which she joined in 1991.

During her thirty-year career, she has served as president of the Cummins Engine Company Foundation in Columbus, Indiana, and as executive director of corporate responsibility and government affairs at Cummins; as manager for the U.S. Department of Housing and Urban Development, Indiana office; and as an attorney with the firm of Lowe, Gray, Steele and Hoffman, Indianapolis. She has, in addition, extensive leadership experience in both higher education and philanthropy and is a trustee of the Indianapolis Foundation — the nation's second oldest and Indiana's largest community foundation — and a co-founder and the current chair of the Central Indiana Community Foundation, which combines more than $355 million in assets of the Indianapolis Foundation, the Legacy Fund, and other community endowments.

A dedicated community leader, Lamkin has been a member of the board of visitors of DePauw University and the president's cabinet of Indiana University, and has served as board chair of the Christian Theological Seminary in Indianapolis, vice-chair of the Citizens Gas and Coke Utility Company, and on the boards of the Independent Colleges of Indiana, the Indianapolis Economic Development Corporation, the Indiana Fiscal Policy Institute, and the Hoosier Capital Girl Scouts of America Council Advisory Board.

Lamkin graduated summa cum laude from California Baptist University, received her master's degree in English and American Literature from Vanderbilt University, and earned her law degree from Indiana University.

Philanthropy News Digest: Tell us about the Lumina Foundation — when was it founded, what is its mission, and what is the focus of its grantmaking?

Martha Lamkin: Lumina Foundation for Education is a private, independent foundation based in Indianapolis. As our name implies, we serve an educational mission — specifically, to expand access to education beyond high school. The foundation was created on July 31, 2000, when USA Group, the nation's largest nonprofit administrator of student loans, sold most of its operating assets, which were then valued at $770 million, making the foundation one of the sixty largest in the country — and the largest one focused exclusively on educational access nationwide. Initially, we were called the USA Group Foundation, but we moved quickly to change our name to better communicate our identity. On February 26, 2001, the foundation officially adopted a new name, Lumina Foundation for Education. By 2002 the average market value of our assets exceeded $930 million, placing us among the top fifty private foundations in the country, according to data gathered by the Foundation Center.

Today, we're using those assets to fund national research, innovative programs, and broad communications efforts around issues that are important to higher education access, with a focus on issues related to financial access, student success in completing their goals beyond high school, and opportunities for underserved students — all in an effort to help people achieve their full potential by pursuing education beyond high school.

PND: Do you make grants to individuals?

ML: No. We focus on research and programs that assist a broad spectrum of students and institutions, either because of the program's scope or the scale of its innovation.

PND: On September 17, 2001, the foundation, in partnership with the Citizens' Scholarship Foundation of America — now called Scholarship America — announced the creation of the Families of Freedom Scholarship Fund for dependents of those killed or permanently disabled as a result of the September 11 terrorist attacks. Can you describe the discussions that led to the creation of the Fund?

"...Like all Americans, we struggled to find an appropriate way to respond to the events of September 11...."

ML: Like all Americans, we struggled to find an appropriate way to respond to the events of September 11. As we talked about those events in the days after the attacks, it seemed to us that other funds were, quite rightly, focusing on the critical short-term needs of the victims' families. But given our mission and the fact that we believe education beyond high school is essential to meeting life's challenges and triumphing over its obstacles, we felt that whether the need for expanded access to postsecondary education was immediate — for example, in the case of family members who were already in school — or wouldn't arise for eighteen or nineteen years, when the babies and infants of some of the victims had reached college age, we were in a position to do something about those needs. So, because we do not give scholarships ourselves, we contacted a knowledgeable partner with long experience in the field, Scholarship America, and, within six days — by September 17 — had provided $3 million to launch the Fund. In return, Scholarship America agreed to manage the program and raise additional funds.

PND: How were you able to secure the participation of former President Clinton and former Senator Dole as honorary co-chairs of the Fund?

ML: Scholarship America and one of its other donors negotiated that arrangement as one of several strategies that emerged to help the Fund grow. Through the efforts of Andy McKelvey, chairman and president of TMP Worldwide, which owns Monster.com, Scholarship America was able to make the appropriate contacts and join forces with Clinton and Dole, who joined as co-chairs of the campaign fund effort and held a press conference in Washington, D.C., on Saturday, September 28, 2001, then produced a public service announcement and agreed to assist in raising monies for the Fund.

PND: Having reached its goal of $100 million, the Fund was closed to contributions on September 4, 2002. Can you give us a breakdown, by donor type, of contributors to the Fund?

ML: Let me first say that we were amazed and inspired by the overwhelming support the Fund received from people of all ages and dozens of countries. Here are a few highlights: The families of Freedom Scholarship Fund received 16,500 gifts from individuals, ranging in size from 50 cents to almost $1 million, and 1,500 corporate gifts, ranging in size from $50 to $2 million. That includes contributions from corporations that collected employee gifts for a general 9/11 fund and then empowered employee committees to decide on the final destination of those funds. We also received gifts from 1,450 organizations, ranging in size from $10 to $8 million, including many gifts from smaller groups such as churches, Scout troops, youth groups, and schools. Again, those gifts were usually made up of contributions from many individuals. And the Fund also received 200 foundation gifts, including major commitments of $20 million from the Citigroup Foundation and $10 million from the DaimlerChrysler Help the Children Fund.

PND: Who's eligible to receive assistance from the Fund?

ML: When we established our fundraising goal, Scholarship America estimated that $100 million would cover approximately 70 percent of the financial needs of qualified applicants. The remainder of the funding would be picked up by other entities, such as federal, state, and institutional sources. If contributions to the Fund exceeded the $100 million goal, the Fund would be able to cover a higher percentage of applicants' needs.

"...In terms of eligibility, all dependent children and spouses of the victims of 9/11, including domestic partners, are eligible for assistance and are asked to register with the Fund...."

In terms of eligibility, all dependent children and spouses of the victims of 9/11, including domestic partners, are eligible for assistance and are asked to register with the Fund. That way, we can continually evaluate their needs.

PND: Will the Fund provide scholarship assistance to the dependents of Pentagon employees and the crew and passengers of the planes that were hijacked?

ML: Yes. The Families of Freedom Scholarship Fund will benefit dependents of September 11 vctims, including airplane crew and passengers, World Trade Center and Pentagon workers and visitors, and firefighters, emergency medical personnel, and law-enforcement personnel.

PND: Do you have an idea of how many people will be aided by the Fund over its lifetime?

ML: We believe it will be in the thousands, but it's an ongoing challenge to identify and register everyone who is eligible. Each year, there will be an actuarial assessment of the number and age of eligible beneficiaries — children and adults — and that information will be used to project how many scholarship recipients can be expected in the remaining years. From that, we can project how much money is needed and allocate the funds so that everyone who is eligible will receive the support they've been promised.

PND: Financial assistance offered by the Fund is need-based. Did you make that decision early on?

ML: Yes. We take a look at school costs and then consider family finances as well as other sources of aid, including scholarships, and then calculate the difference. However, other funders indicated that their donations could be given regardless of need, so we think that, at a minimum, most applicants will receive $1,000 per year for out-of-pocket expenses.

PND: Are awards from the Fund pegged to the rate of inflation?

ML: Well, to the extent that the Fund and the number of applicants are re-evaluated on an annual basis, it will take into account such factors as inflation.

PND: Do you plan to take into account the changing financial circumstances of individual applicants over time?

ML: Yes. When a dependent is ready to apply to school, that will be the appropriate time to assess the financial circumstances of his or her family, the costs he or she is facing, and the level of his or her need.

PND: Can awards from the Fund be used for non-traditional postsecondary programs?

ML: Yes, as long as the program is offered by an accredited postsecondary institution or, in the case of vocational programs or trade schools, has an approved license or an endorsement from an industry association.

PND: Earlier, you mentioned other programs that are providing scholarship assistance to 9/11 dependents. Are you coordinating your efforts with entities such as New York State and the September 11th Scholarship Alliance?

ML: Yes we are. Again, because Lumina Foundation is not a scholarship organization, this is an area where we rely on the expertise of our partner, Scholarship America. It really manages the Fund, makes the actuarial determinations, and so on. Scholarship America partnered with Citigroup on the 9/11 Scholarship Alliance effort, which is a coordinated effort to assist the dependents of 9/11 victims as they reach college age. For instance, because the New York State fund provides financial assistance toward the cost of attending a public institution in New York, the Families of Freedom Scholarship Fund will provide assistance for incidental expenses. If 9/11 dependents want to attend a private institution in New York, they can, as I understand it, still receive scholarship assistance equivalent to what they would get if they attended a public institution, and then the Fund would help them meet the difference between the cost of the public and private institutions.

PND: Have you taken steps to ensure that, twenty-five years from now, you achieved what you set out to accomplish with the Fund back in September 2001?

ML: Scholarship America plans to stay in close contact with the eligible families over time. And, of course, it will need to rely on those families to stay in touch with it, as well.

If you're talking about transparency and accountability, Scholarship America, under its previous name, the Citizens' Scholarship Foundation of America, has repeatedly been listed as one of the most effective nonprofits in the country, which is one reason why we chose to partner with it. Its credibility as a good trustee of funds held on behalf of organizations across the country is impeccable, and I'm sure that, after taking into account the needs of all the participants, it will make the proper investment decisions over time.

PND: Have you established a termination date for the Fund? What happens to assets that haven't been disbursed by that date?

ML: Yes, any assets remaining in the Fund as of December 31, 2030, may be used by Scholarship America to support its other postsecondary education scholarship programs.

PND: A final question related to the Fund: Have you and Scholarship America had discussions or developed a contingency plan that takes into account future terrorist attacks?

ML: We have not undertaken that discussion at this point.

PND: I want to switch tracks and talk about the foundation's work in the field of postsecondary education. Are minority and low-income students increasing their representation on college campuses, falling behind in terms of representation, or holding onto the gains they've made over the last two decades?

"...Expected demographic shifts and increasing financial barriers could push a postsecondary education further out of reach for students who already face significant challenges...."

ML: Higher education has made significant strides in terms of reaching out to and increasing the numbers of underserved students. But a major concern for all of us is the fact that expected demographic shifts and increasing financial barriers could push a postsecondary education further out of reach for students who already face significant challenges in trying to continue their education beyond high school — especially if they come from a low-income family, a family of color, or if they are the first in their families to attend a postecondary institution.

Let me give you a few facts. Historically underrepresented students are expected to constitute an increasing proportion of the college-age population in the coming years. According to a 2001 study by the National Center for Education Statistics, over the next ten years the number of students pursuing a postsecondary education will jump by more than two million. The Hispanic student population will account for nearly fifty percent of that growth, while the growth in the Caucasian and African-American student populations is expected to come in around eighteen and sixteen percent, respectively. So we think demographic trends are important.

Another issue is financial. As you undoubtedly know, many states across the country are facing significant budget shortfalls, and those tend to have a cascading effect, particularly on public education institutions, where most of the underserved students I alluded to will begin their postsecondary careers. As a society, the challenge going forward will be to figure out how to help larger groups of college-age students with significant financial needs even as state and federal pools of financial aid are stagnant or shrinking.

But we need to take the college access question a step further. For underserved students, getting into college is only the first hurdle. Researchers who examine graduation rates have noted a growing difference in the rate at which students of different income levels finish college. This attainment gap is not shrinking significantly. Recent research from the University of Virginia revealed no real improvement over time in the overall share of low-income students receiving a college degree. We need to continue to improve college access and increase our efforts in helping these underserved students achieve their higher education goals.

PND: The cost of a college education has consistently outpaced the rate of inflation over the last two decades and even now, in a near-zero inflation environment, continues to rise. Why?

ML: It's a complex problem to which there are no easy answers or solutions. Colleges and universities are struggling to meet the costs associated with an increased use of technology. They have to replace aging infrastructure. They have talented faculty — a fixed cost — who need and deserve ongoing support. And, as I mentioned, federal and state government support has either not kept pace with rising costs or, in some cases, has been cut. Two-thirds of the states have budget shortfalls, representing a total shortfall of roughly $26 billion, and from 2001 to 2002 state spending on higher education nationwide increased just one percent. Overall, appropriations for higher education actually dropped in fourteen states. So, while overall state spending on financial aid actually increased by 8 percent, to $5.5 billion, from 2002 to 2003, tuition costs on average increased 10 percent. In other words, when it comes to postsecondary education, there's a growing affordability gap for those with limited financial means.

PND: If these trends persist, can you imagine a time in the not-too-distant future when a college education is priced beyond the means of most young Americans?

"...Education improves the quality of our lives, fuels the long-term economic gains we need to sustain our economy, and is vital to the health of our civic life and participation...."

ML: Because education is so important and prized by our society, I am convinced that, as a society, we will figure out a way to address this issue. On an individual level, education improves the quality of our lives, fuels the long-term economic gains we need to sustain our economy, and is vital to the health of our civic life and participation. So while it will require broad partnerships between public and private stakeholders, I am convinced — and hopeful — that we will come up with a solution to the problem.

PND:Do you see potential in new communication technologies such as the Internet to mitigate these problems?

ML: While technology can improve access to postsecondary education, it's not the solution for every issue in the field, or every audience. For instance, I recently visited a community college in Florida that has a high degree of online engagement with its students. I found it interesting, however, that most of the students traveled to campus to participate in online classes. And that's because, by being on campus, they have better access to on-site tutors, guidance counselors, and their peers. The human element is still a very important part of the postsecondary experience.

PND: Lumina Foundation puts considerable resources into research and evaluation. What do you hope to achieve through those activities, and who are the target audiences for that work?

ML: In the early days of the foundation we consulted with a number of opinion leaders in the field, and one of the valuable things they shared with us was the idea that quality research can be a foundation's most lasting contribution to society. As a result, we made a conscious decision to emphasize research, because we believed, and continue to believe, that it would inform our grantmaking and, we hoped, also contribute to the public conversation about higher education. Today, as much as ever, we want our grantmaking to be grounded in data, and we are eager to learn more about the issues that concern us through evaluation and to communicate the lessons we learn. In the final analysis, we hope that policy makers, institutions of higher education, nonprofit groups, and others with an interest in higher education will find the research we support helpful in furthering their own missions.

PND: Does the foundation have any plans to spend itself out? And if not, how do you think your mission and objectives will change over the next few decades?

ML: We think there are more than enough challenges and opportunities in the areas of higher education access and success to keep the foundation engaged for years to come. For instance, the Bureau of Labor Statistics projects that occupations requiring a postsecondary vocational or academic degree will account for 42 percent of total job growth between 2000 and 2010. We also see a number of foundations shifting their focus away from higher education. Because of that, we believe we have an even greater opportunity and, one could argue, obligation to stay the course with our current mission.

Beyond that, postsecondary completion rates are still disappointingly low, and we think more needs to be done to assure that students have successful careers beyond high school, so we plan to evolve our work to meet that need. But for the foreseeable future, we'll remain focused on access to education beyond high school.

PND: Well, Martha, thank you for speaking with us this morning.

ML: You're very welcome.

Mitch Nauffts, PND's editorial director, interviewed Martha Lamkin in March. For more information on the Newsmakers series, contact Mitch at mfn@fdncenter.org.